Electricity prices and fuel prices, which are constantly rising because of their dependence on the foreign exchange rate, are no longer sustainable, Minister of Economy and Energy Ozdil Nami has said.
In an interview with Haber Kibris agency (HK), Nami noted that Cyprus is in fortunate in its geographical position regarding its potential to generate solar energy. Experts continue to work intensively on the issues of renewable energy, he added. Projects to produce renewable energy and conveying electricity by undersea cable from Turkey will emerge soon, said Nami. These sources will support each other, he said.
The minister stressed that a serious effort to minimise or eliminate energy costs is being made.
Arguing that the most important element of electricity production is the fuel which constitutes two thirds of the cost, Nami said that to avoid price fluctuations, different sources should be sought out. He added: “We did this for a while, but these possibilities were exhausted. So the duty which falls to all of us is to maximise savings at home”. He continued by giving examples of how to reduce energy consumption in the home.
Nami further said: “I wish the state had other revenue streams that could keep the price of fuel or electricity low by subsidising it”. He noted that “the government has taken measures twice on price regulations and the reduction in prices has not been passed on to the consumer”, adding that these possibilities both in electricity and in fuel have been exhausted. In a period where the dollar is fluctuating so much, Nami said that price regulation should be implemented and methods to produce cheaper electricity should be examined.
Asked to comment on whether the ministry has made a study on this topic, Nami said that the Turkish Cypriot Electricity Authority Kib-Tek and ministry employees are continuously doing research on this issue and their counterparts from Turkey are also helping them in this regard. He also said that he has a meeting, most weeks, with his counterpart in Turkey. Kib-Tek is doing its own research, and private companies keep the ministry informed on their progress.
When asked if there would be an increase in electricity rates again next month, Nami said: “This is not an issue that is up to us to decide. This is regulated by legislation. We have changed the relevant legislation to delay the reflection period and have increased the rate of the price adjustment but of course, there are limitations, but when this day comes it will be done. As the dollar rates go up, these price adjustments are inevitable. There has been a certain amount of influence on fuel prices by sacrificing the state price stability fund, but we have already reached its lowest limit. These are the things we have to do. However, if we do not make these adjustments, it will lead to much bigger problems and higher costs in the future for our economy and especially our institutions such as Kib-Tek”.
Nami stressed that the issue of transferring electricity via undersea cable from Turkey should be seriously considered, but it would be a long-term solution. He added that reports on how the interconnected system would bring down the cost have been submitted to his ministry and now they are in the process of verifying these reports. Noting that “there is a protocol signed between the TRNC and Turkish governments to lay the cable”, Nami said that “this protocol constitutes the legal framework for the ongoing works”.